Dive Brief:
- Tapestry Inc.’s second-quarter 2024 revenue exceeded its own estimates with $2.1 billion in revenue, a 3% year-over-year increase, a record for the period, according to a company press release.
- The Coach brand was Tapestry’s strongest earner, with $1.5 billion in revenue, a 6% increase from the prior year. Kate Spade and Stuart Weitzman saw declines of 6% and 4%, respectively.
- Tapestry also reported a net interest expense of $49 million, based on debt it incurred from financing the planned acquisition of Capri Holdings. The deal, which was announced last year, is expected to close later this year. Capri is releasing its earnings report after the market closes on Thursday.
Dive Insight:
The acquisition of Capri, which includes brands Michael Kors, Jimmy Choo and Versace, will create the fourth largest luxury house in the world, with a combined share of around 5.1% of the global luxury goods market, according to Wells Fargo analysts. Tapestry said it doesn’t expect the deal to add a revenue contribution or deal-related costs in fiscal 2024.
The company said it expects $6.7 billion in revenue for the year. It raised its earnings per share outlook for the full 2024 fiscal year based on its Q2 results.
The company’s international revenue grew 12%, including a 19% boost in China and 11% in Europe. Revenue in North America was in line with the prior year’s results, a region where Tapestry saw revenue declines during its fiscal 2023.
“Moving forward, we have an unwavering commitment to deliver sustainable growth and shareholder value,” Joanne Crevoiserat, CEO of Tapestry, said in the release. “We will continue to put the consumer at the center of everything we do, building our brands for the future and harnessing our data-driven, customer engagement platform to enhance creativity, speed, and agility.”
The company credited the Coach brand for its performance in the new product and branding initiatives. Last year, Coach launched the Coachtopia sub-brand, which focuses on circular fashion with all-gender bags, accessories, ready-to-wear and footwear with recycled materials, a bid for a younger consumer.
Tapestry said it acquired 2.5 million new customers in North America, about half were Gen Z and Millennials.
